What makes you conclude that there’s a lot of money to be made in it?
My prior is the opposite. MDMA and psilocybin themselves aren’t patentable at this point. Yes, delivery mechanisms could be and new or related unpatented compounds could be. But any for profit company will likely be competing against at least a non profit or two. And my research on pricing is that having a single competitor massively reduces margins and profitability.
Also dosing will be highly infrequent which should also reduce the profits for any psychedelic pharma companies.
Given the risk in pharma r&d, potential profits presumably need to be very large to justify investment. My sense is that the expected rate of return may be lower than other similarly risky projects and therefore it won’t be particularly suited to for profits. But maybe it’ll be somewhat profitable and the reward of positive impact will make up the difference. Or maybe thanks to many years of use, these compounds have much lower risk and therefore make sense from a risk reward perspective to be pursued by pharma investors/companies.
But I’m skeptical of that and I expect that we’ll need altruistically motivated people to make progress, and if it’s left to for profits the industry would stagnate. (One piece of evidence is that the for profit pharma world has seemingly made no progress in the psychedelic field since about the 1970s with the exception of compass pathways a few years ago)
You have a good point: if a big pharma can’t have IP over a psychedelic product, at least in our current system, it has no incentives to invest on risky R&D. However, we do observeincreasing private funding for psychedelic research and a lot of recent exposure; and the war on drugs explains enough of the halt in psychedelics research in the 70′s. So, despite updating my priors, I still don’t think that donating for this cause would result, in the margin, in more QALY than donating to GD, in general.
So, despite updating my priors, I still don’t think that donating for this cause would result, in the margin, in more QALY than donating to GD, in general.
What’s your ballpark dollars-per-QALY estimate for GiveDirectly donations, and your ballpark dollars-per-QALY estimate for the psychedelic intervention you have in mind?
This analysis could be helpful as a jumping-off point for the latter.
First, I’m not referring GD as our best charity, but just as a minimal standard for EA causes.
Second, last time I checked (please, update if I’m wrong):
GW considered 1 life = 35 QALY. So, I estimate GD results in U$200/QALY
(Actually, there are huge uncertainties over this estimate, and GW is not conclusive about GDs effectiveness in terms of lives and QALY. But one could pick AMF or SCI instead as a standard)
I’m assuming DALY = 1 - QALY
Enthea’s estimate of psychedelics liberalization is of $472/DALY.
I do agree that QALY is biased towards some interventions, and that mental health is usually underestimated by healthy people (I suspect they are unduly led by the lack of physical and apparent symptoms). I do think we should find out how to treat depression properly (maybe some neglected, cheap and scalable solution end up becoming an EA-like charity).
However, I don’t believe Enthea poll is free of biases, either; particularly, it seems to me that people in developed countries consistently underestimate the burden of disease and poverty in the 3o world, screwing the comparison in the opposite way.
Notwithstanding, my main point is not so much about impact, but about neglectedness; 32 million people had experimented with psychedelics only in US by 2010 (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3917651/). If each of them donated an average of U$ 1 for this cause, they would match all of GDs transfers in 2017. I do believe we should liberalize psychedelics—and probably we will, eventually,since many people with considerable purchase power are interested in it.
Agree. I kind of regret mentioning QALY in my argument, but do notice that I was trying to be healthy skeptical when I mentioned “I still don’t think that donating for this cause would result, in the margin, in more QALY than donating to GD, in general”. I never said I was confident that GD would result in more QALYs than supporting psychedelics.
I think there will be psychedelic for-profit ventures & investment. (That’s a different claim than the claim that there’s already enough donor dollars in the space.)
My current view is that almost all of the for-profit investment that comes into the space will flow through highly suboptimal structures (e.g. pharma companies trying to achieve frivolous patents that give them a monopoly – this is already happening with esketamine).
Savvy philanthropic work could help push us out of that regime & towards a better one.
What makes you conclude that there’s a lot of money to be made in it? My prior is the opposite. MDMA and psilocybin themselves aren’t patentable at this point. Yes, delivery mechanisms could be and new or related unpatented compounds could be. But any for profit company will likely be competing against at least a non profit or two. And my research on pricing is that having a single competitor massively reduces margins and profitability. Also dosing will be highly infrequent which should also reduce the profits for any psychedelic pharma companies.
Given the risk in pharma r&d, potential profits presumably need to be very large to justify investment. My sense is that the expected rate of return may be lower than other similarly risky projects and therefore it won’t be particularly suited to for profits. But maybe it’ll be somewhat profitable and the reward of positive impact will make up the difference. Or maybe thanks to many years of use, these compounds have much lower risk and therefore make sense from a risk reward perspective to be pursued by pharma investors/companies.
But I’m skeptical of that and I expect that we’ll need altruistically motivated people to make progress, and if it’s left to for profits the industry would stagnate. (One piece of evidence is that the for profit pharma world has seemingly made no progress in the psychedelic field since about the 1970s with the exception of compass pathways a few years ago)
You have a good point: if a big pharma can’t have IP over a psychedelic product, at least in our current system, it has no incentives to invest on risky R&D. However, we do observe increasing private funding for psychedelic research and a lot of recent exposure; and the war on drugs explains enough of the halt in psychedelics research in the 70′s. So, despite updating my priors, I still don’t think that donating for this cause would result, in the margin, in more QALY than donating to GD, in general.
What’s your ballpark dollars-per-QALY estimate for GiveDirectly donations, and your ballpark dollars-per-QALY estimate for the psychedelic intervention you have in mind?
This analysis could be helpful as a jumping-off point for the latter.
Also note that the QALY framework likely underweights mental health interventions.
First, I’m not referring GD as our best charity, but just as a minimal standard for EA causes. Second, last time I checked (please, update if I’m wrong):
GD was considered to be saving 1 life per U$7000 on nov 2016 by GW: https://docs.google.com/spreadsheets/d/1KiWfiAGX_QZhRbC9xkzf3I8IqsXC5kkr-nwY_feVlcM/edit#gid=1034883018
GW considered 1 life = 35 QALY. So, I estimate GD results in U$200/QALY (Actually, there are huge uncertainties over this estimate, and GW is not conclusive about GDs effectiveness in terms of lives and QALY. But one could pick AMF or SCI instead as a standard)
I’m assuming DALY = 1 - QALY
Enthea’s estimate of psychedelics liberalization is of $472/DALY.
I do agree that QALY is biased towards some interventions, and that mental health is usually underestimated by healthy people (I suspect they are unduly led by the lack of physical and apparent symptoms). I do think we should find out how to treat depression properly (maybe some neglected, cheap and scalable solution end up becoming an EA-like charity). However, I don’t believe Enthea poll is free of biases, either; particularly, it seems to me that people in developed countries consistently underestimate the burden of disease and poverty in the 3o world, screwing the comparison in the opposite way. Notwithstanding, my main point is not so much about impact, but about neglectedness; 32 million people had experimented with psychedelics only in US by 2010 (https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3917651/). If each of them donated an average of U$ 1 for this cause, they would match all of GDs transfers in 2017. I do believe we should liberalize psychedelics—and probably we will, eventually,since many people with considerable purchase power are interested in it.
Got it, thanks.
As far as I know, GiveWell considers cost-effectiveness estimates as informative for efficacy differences that are orders of magnitude apart.
For two interventions that are on the same order of magnitude, the analyses aren’t granular enough to believably inform which is more effective.
Agree. I kind of regret mentioning QALY in my argument, but do notice that I was trying to be healthy skeptical when I mentioned “I still don’t think that donating for this cause would result, in the margin, in more QALY than donating to GD, in general”. I never said I was confident that GD would result in more QALYs than supporting psychedelics.
Okay. I’m not sure if there’s a crux here, in that case.
fwiw I think it’s very hard to get people to donate to things.
From section 4(b) of the OP: “Roughly $40 million has been committed to psychedelic research since 2000.”
True, but people are already competing to invest in THC providers. Why wouldn’t they do it for psychedelics?
I think there will be psychedelic for-profit ventures & investment. (That’s a different claim than the claim that there’s already enough donor dollars in the space.)
My current view is that almost all of the for-profit investment that comes into the space will flow through highly suboptimal structures (e.g. pharma companies trying to achieve frivolous patents that give them a monopoly – this is already happening with esketamine).
Savvy philanthropic work could help push us out of that regime & towards a better one.